Customer data is the cornerstone of effective marketing in today’s digital-first world. Collecting customer data from diverse sources and unifying it under each customer profile enables marketers to activate data in real time. This activation is crucial for creating and executing hyper-personalized campaigns. Modern customer data platforms (CDPs) take this process to the next level, leveraging AI to deliver predictive analytics, intelligent recommendations and advanced segmentation.
The global customer data platform market size is projected to grow from $3.5 billion in 2021 to $15.3 billion by 2026 at a compound annual growth rate (CAGR) of 34.6% during the forecast period1, signifying the growing importance of CDPs.
The expanding market for CDPs also highlights a growing need for compliance and seamless integration capabilities. As businesses navigate a landscape filled with varying data privacy regulations, CDPs that offer robust compliance tools become increasingly indispensable. Moreover, their ability to integrate with various systems like CRM ensures they can serve as a central hub for all customer data needs, enhancing their appeal and utility across industries.
With this kind of a potential, the only question remaining is: how and when does a customer data platform pay for itself? This blog will uncover the strategies and best practices to improve your CDP’s time to value, helping you achieve faster ROI, enhanced customer engagement and sustainable business growth. Let’s dive in!
The Importance of Time to Value (TtV)
The true value of a customer data platform lies in the incremental profit generated from the data aggregated and presented by a CDP. The aim of using a CDP is to recommend the most suitable services to the customers and personalize their experience on the basis of their profile. The TtV is important because it determines how quickly marketing can achieve that. A lower TtV can help teams reap the benefits faster and justify the returns on their CDP investment.
Marketers aim to maximize the value/incremental profit of their CDP by leveraging it to solve common modern day marketing challenges in utilizing customer data to the best of its potential. This calls for a clear understanding of these challenges. Let’s look at some of them in the next section.
Key Challenges in Leveraging Customer Data
Businesses today recognize the need to invest in their data infrastructure to drive sales and answer internal business questions. Identifying patterns to generate data insights is pivotal in driving smart decision-making and strategy. Businesses optimize their marketing efforts and enhance operational efficiency by analyzing customer data.
However, interpreting customer data insights at scale in an ongoing way is not easy without its challenges, and knowing how to remediate them is vital. Here are the common challenges businesses face in seamless data collection, analysis and strategic application.
1. Data Fragmentation:
Data fragmentation can make managing, analyzing and integrating data difficult. Some issues arising from data fragmentation are incomplete data, where teams may only have access to a fraction of the available data and inaccurate data. Different owners across teams and systems may create different tracking plans, and other teams may not be able to easily access data collected by their colleagues, leading to inconsistent data.
2. Inefficient Data Management
Out-of-sync data systems make it difficult for any organization to manage massive amounts of data. As a result, they need to deal with raw, irrelevant data. This may be a time-consuming process and may hinder timely availability of useful data, leading to missed opportunities and late decision-making.
3. Resource Allocation
When allocating resources, it’s important to strike a balance so that each customer project phase has what it needs without overextending resources. Without automation, it is difficult to retrieve insights from real-time customer data, identify high-value segments, predict a customer’s future steps, and hence allocate resources accordingly.
4. Data Privacy and Compliance
The collection and usage of data must be done responsibly, in compliance with the regulatory standards like the GDPR and CCPA. Non-adherence can lead to millions of dollars being lost in regulatory fines. While data privacy and compliance are critical to an organization’s reputation, organizations often struggle to maintain it.
A CDP offers an effective solution in helping marketers solve these challenges. By unifying data from disconnected systems and implementing data governance, it helps in the maximum utilization of the data. Its data management, tracking and identification abilities ensure compliance with GDPR, CCPA (California) and DPDP (India) regulations, thus alleviating data privacy concerns. The system provides tools like tokenization and hybrid deployment for creating personalized experiences leveraging personally identifiable information (PII). It also leverages customer data insights to help you make critical resource and campaign related decisions, and back them while communicating them to the leadership.
While the inherent capabilities of a customer data platform and the common challenges it solves for marketers are well acknowledged, the onus of maximizing its TtV lies with the marketing teams. Let’s discuss four key strategies marketers must use to achieve this.
Four Strategies to Maximize Time to Value from a CDP
1. Prioritize Personalized Customer Experiences
The unified 360-degree customer view provided by CDP gives businesses a deeper understanding of a customer’s preferences and behaviors. Based on these insights, businesses set up messaging strategies that will align with the customer’s expectations and will boost customer loyalty. In fact, according to a report2, 88% of U.S. marketers reported seeing improvements by leveraging personalized experiences to reach their customers. Customers feel valued and understood and are more likely to return and make repeat purchases, building a strong brand reputation.
2. Optimize Digital Advertising with Customer Data
A customer data platform creates targeted audience segments after capturing data from all channels to create an accurate, real-time, 360-degree customer view. These 360-degree customer profiles allow you to target specific segments with highly relevant ads, improving the effectiveness of your campaigns. Businesses can leverage these segments and use A/B testing to determine the most effective messaging and offers, thus optimizing their digital advertising efforts.
3. Build a More Efficient Data Infrastructure
Customer data platforms can streamline data management processes and craft connected end-to-end customer experiences. With its robust data infrastructure, businesses can make informed decisions and free up data engineers from manual tasks, which can lead to higher-value activities. Such data systems are unified, preventing silos and promoting teamwork. With accurate data support, organizations also align with standards like GDPR and HIPAA.
4. Adopt an Agile Implementation Approach
The implementation process is a critical aspect in deriving maximum possible value out of a CDP. Organizations must adopt an agile approach to this by breaking the process into smaller, manageable phases such as data unification, audience segmentation and real-time activation. They can also launch a minimum viable product (MVP) CDP to test functionalities and achieve incremental wins early. This approach will help streamline the process while realizing tangible benefits early on.
Conclusion
The key to maximizing the time to value of a CDP lies in leveraging each of its core functionalities to the best of their use. With an intelligent CDP, businesses can unlock the power of their martech stack to orchestrate successful omnichannel customer journeys while being compliant with all data regulations. Thus, marketers must understand how they can best use a CDP for the insights it offers to drive efficiencies in their campaigns. You can start on this journey today by availing a customer data platform demo and explore how your business can benefit from a CDP.
